Question 1
The United States economy needs to be protected from the high-risk gambles in the securities/banking, a basis of the economy. The administrative agencies such as the Commodities Futures Trading Commission (CFTC) as well as the Securities and Exchange Commission (SEC) should thus be at the forefront in protecting the economy by preventing these high-risk gambles in banking/securities.
These two administrative agencies played a key role in inspecting massive trading losses in JP Morgan Chase case. The investigation by SEC could only center on completeness and appropriateness of the financial reporting of JP Morgan Chase as well as other public disclosures. Nonetheless, Mary Schapiro, SEC chairperson argued that the investigation by her agency was limited, since the trade took place in divisions of banking giant, which are not subject to the regulation of SEC. Despite her arguments, there is a necessity for this agency as well as CFTC agency to take action to be effective in preventing the high-risk gambles in banking/securities such as the one with JP Morgan Chase.
The mission of United States Securities and Exchange Commission is essentially to protect the investors, maintain orderly, efficient, and fair markets, in addition to facilitating the capital formation. Demanding the public companies to disclose financial information that is meaningful to the public is actually an effective approach, which SEC takes to ensure securities of United States (United States, 2009). In fact, this helps the investors prevent the high-risk gambles besides allowing them to make well-informed and sound decisions when making a decision on the companies to invest in.
On the other hand, the Community Futures Trading Commission (CFTC) role is to regulate commodity futures as well as options markets. The goals of this commission include promotion of the efficient and competitive future markets besides protecting the investors against fraud, abusive trade practices and manipulation. Therefore, by promoting efficient as well as competitive future markets besides protecting the investors against fraud, abusive trade practices and manipulation, is essentially an effective approach, which CFTC takes to ensure securities of United States.
Question 2
One of the necessary elements of a contract that is valid is offer and acceptance. To make a valid contract, a “lawful offer” by one of the parties as well as a “lawful acceptance” of same by other party must exist. Lawful consideration is the other fundamental element of a valid contract. This element is where the two parties to an agreement refrain from doing or consider to do some practice of lawful act. Consideration also refers to the exchange of money between two entities that are in an agreement for goods or services.
The third element of a valid contract is the intention to create Legal relationship. If there exists no such intention on one of the parties to a contract, the contract is presumed not to exist. The agreements of domestic or social nature do not qualify to be legal relations. The other element that defines a valid contract is capacity of the parties. Parties to an agreement should actually be competent to contract. The contract is assumed invalid if either of parties fails to have the capacity to contract. Another important element that defines a valid contract is the element of free consent. This means that the parties should have agreed upon similar thing in the equal sense (Keenan & Riches, 2007).
In the banking context, banks and consumers are required to have a duty of fair dealing and good faith in the banking relationship by ensuring that the contracts that they enter into are defined by all of the above-discussed elements. For instance, a bank can refuse to fund, call a loan, set off accounts, and refuse to roll over a given loan among other things no matter how severe foreseeable consequences may be to the customer/borrower, so long as it acts within the expressly granted rights under the documents of loan controlling.
Question 3
Tort laws are essentially the laws, which offer remedies to the individuals who are harmed by tort/unreasonable actions of the others. The two major kinds of civil torts are the intentional tort and tort of negligence. An intentional tort action refers to an injury, which is sustained by an act that is intentional rather than an act of accident or negligence. The examples of the intentional tort actions are false imprisonment, trespassing, and batter and assault.
The two kinds of civil torts share a number of similarities. For one, one can bring a certain cause of action against the offender for both negligent and intentional tort actions. The two types of civil torts are also actionable meaning that actions can be taken against the offenders. In addition, both negligent and intentional tort actions are compensable (Keenan & Riches, 2007). This means that a plaintiff is compensated after the court identifies the harm that results from these actions.
The intentional torts are simply purposeful acts to harm other individual(s) whereas a negligence act is failing to act to rectify a certain problem, which can harm another individual. For an intentional tort action, the plaintiff must prove that a tortfeasor meant to engage in an action, which resulted in tort action. This means that the complainant must prove extra element that the offender acted with precise intent to perform an act that was proximate cause of complainant’s injuries or harms. This is not the case with negligence tort actions.
The other difference between these two tort actions is that in the negligence tort, actions leading to the injury are neither intended nor expected, as is the case with intentional tort. Moreover, the damages that are available for the intentional tort actions appear to be more generous and broader than for the negligent tort actions.
Question 4
Intentional Interference with Contractual Relations or Tortious interference in common law of torts happens when an individual deliberately damages the appellant’s contractual or the other business relationships. The categories under this tort include one specific to the business activities or relationships (regardless of whether they involve contract), and other specific to the contractual relationships (regardless of whether they involve the business).
The tortious interference with the contract right can actually take place where a tortfeasor disrupts one party ability to perform his or her contractual obligations, or convinces the party to engage in contract breach, hence preventing the appellant from receiving the promised performance. A good example of tortious interference tort takes place when a party induces the other to engage in contract breach with the third party, in the conditions where first party lacks privilege to act the way it does. The tortious interference with the business relations happens where tortfeasor acts to avert the complainant from maintaining or establishing business relationships successfully (Keenan & Riches, 2007). The typical damages for this kind of tort include the economic losses given that they are proven with mental distress and certainty. In addition, the punitive damages might be awarded given that there is established malice on part of wrongdoer.
Participating in a Breach of Fiduciary duty tort is an intentional tort. A Fiduciary relationship occurs where a given party in a contract has a duty to act with utmost good faith for other party’s benefit. The breach of fiduciary duty assertions normally involve the claims that the fiduciary has essentially breached his/her/its duty of confidentiality, duty of loyalty, and/or duty of reasonable care. The claims of wrongful conduct might include the charges that fiduciary has misused and/or dissipated the corporate assets, has refused to permit a shareholder access to the corporate records and books, or has enriched himself/herself/itself at corporation expense.
Question 5
Internet banking/mobile banking/E-banking has actually allowed the customers of many financial institutions to conduct their financial transactions on the secure websites that are operated by these institutions. These institutions or banks have been successful in protecting the software, which allows online transactions to happen through automation. Many banks are committed to make online banking safe as well as secure. This Online Banking Security Guarantee by various banks covers security of their customers’ bank accounts, time processing of their payments, and security of their information.
Many banks have ensured that this software is secure by the using fraud prevention and security systems to protect their customers with latest encryption technology as well as secure email communications. The computer anti-virus protection that they use detects besides protecting the computer viruses from entering their computer network systems (SCN Education, 2001). They also use the firewalls to block the unauthorized access to the customers’ accounts by networks or individuals.
Many banks use encryption technology like Sure Socket Layer (SSL) on their websites to transmit the information between them and their customers. This help to protect the data through three ways. Firstly, authentication guarantees that these banks communicates with their customers and prevents other computers from impersonating them. Secondly, the encryption scrambles the transferred data so that unauthorized persons cannot read this data. Lastly, the data integrity verifies that information customers send to their banks is not changed during the transfer (SCN Education, 2001).
References
Keenan, D. J., & Riches, S. (2007). Business law. Harlow: Pearson Longman.
SCN Education B.V. (2001). Electronic banking: The ultimate guide to business and technology of online banking. Braunschweig: Vieweg.
United States., & United States. (2009). Information security: Securities and Exchange Commission needs to consistently implement effective controls: report to the Chairman, Securities and Exchange Commission. Washington, D.C.: U.S. Govt. Accountability Office.
